Oil companies continue fuel supply to Air India

New Delhi: State-owned oil companies on Friday decided to defer snapping fuel supplies to Air India after the national carrier promised to adhere to the schedule of clearing past outstanding dues, officials said.

Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had on October 5 written to Air India that they will stop supplying aviation turbine fuel (ATF) to its aircraft at six major airports from October 18 if it didn't honour its payment commitments.

"It (Air India) has made a request not to stop supplies and promised to make regular payments. In view of their commitment, we have decided to defer the decision to terminate supplies," an official at one of the fuel retailers said.

Air India owes the three firms over Rs 5,000 crore in past fuel bills and had first in June and again in September agreed to pay this amount in monthly installments of Rs 100 crore.

But Air India failed to honour its commitment, leading to the October 5 notice. Air India owes IOC about Rs 2,700 crore in unpaid fuel bills.

This includes Rs 450 crore of interest. It's outstanding towards the three oil firms is about Rs 5,000 crore including interest.